25 February 2020

Chairperson: Mr M Mandela (ANC)

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Meeting Summary

The Department of Agriculture, Forestry and Fisheries (DAFF) said it had received a qualified audit opinion from the Auditor General of South Africa (AGSA) for the 2018/19 financial year. The basis for the opinion was that AGSA had not found a record of the disposal of the Department’s biological assets because there were inadequate systems to record the disposals, so the amount of disposals disclosed had been misstated. Other findings involved suppliers who failed to declare their relationship with persons employed by the state; remunerative work outside the employment of the Department and employees’ disclosure of interest; invoices not paid within 30 days; late capturing of all categories of leave days; and poor safeguarding of the assets located within its KwaZulu-Natal plantation.

The Department was continuing to experience challenges with regard to the management of transversal performance indicators, and these had contributed greatly to the unfavourable audit findings. As a result, it would be embarking on a process to review these transversal indicators to address the identified challenges and to ensure it adapts to the concept of “following the money”.

The Department’s vacancy rate had increased from 20.9% to 21.7% in the last quarter, and it had 1 326 vacant posts. The development of the macro organisational structure for the Department had been finalised. The implementation of early retirement without penalisation of pension was still a work in progress. The implementation of the Workplace Skills Plan was being monitored and reports had been submitted to the Public Service Education and Training Authority ( PSETA).

The Agricultural Research Council (ARC) said it had received a qualified audit opinion for three consecutive years since 2016/17. The problematic areas were around compliance with procurement and contract management; revenue collection; biological assets; limitation of scope; trade and other receivables and trade and other payables; and uncorrected misstatements. On initiatives that had been completed, prior year misstatements had been corrected in the financial records; improvements had been recorded in overall corporate governance; job profiles had been enhanced and performance agreements strengthened; interim financial statements had been submitted to the AG; and 100% of all assets had been physically verified, except for land and buildings.

The Ingonyama Trust Board (ITB) said the second quarter overall performance had been better than the previous year, standing at 79% compared to the previous 60%. It talked about its audit improvement plan report, and indicated that in order to address irregular expenditure, the entity needed to capacitate its supply chain management (SCM) unit with the requisite skills, and National Treasury would provide training during March 2020. Regarding revenue royalties, the constitution of the mining committee had to rectify royalty administration, and confirm with the Department of Mineral Resources how much royalties had been claimed by National Treasury that belonged to the ITB. It also needed to appoint a debt manager for revenue collection, and was preparing and updating the land register based on information at the Deeds Office and Surveyor General, and obtaining up to date municipal valuation rolls for the computation of land values.

Members commented that they were not happy about the DAFF’s cancellation of the Nelson Mandela Day, the Women’s Summit and the Female Entrepreneur Awards, because there were many issues women were looking forward to addressing during these events. They wanted to know why there was a change of focus in the process of integrating systems for the merged departments. It was pointed out that not a single provincial department of agriculture had met the first and second quarter targets. They enquired how the Department was planning to address the problems of suppliers that were not paid on time, corrupt officials, a non-existent leave policy, and employees doing business with the Department.

Members asked for clarity on several delays to the initiatives of the ARC, especially on biological assets; wanted to know which other diseases were posing challenges in the laboratories besides foot and mouth disease (FMD); how the ARC was going to deal with the lack of revenue collection and long standing debtors; and if it had plans to implement consequence management.

The Committee asked the ITB to inform it of the policies it was planning to approve in the future, and to provide a list of service providers and costs related to training. Members pointed out that R4.6m had been spent on two workshops or training programmes, and they wanted to find out if it had been spent before the appointment of the training coordinator. They asked if the relationship between AGSA and the ITB could be mended, because there had been no understanding as to what the ITB should be audited on.

Meeting report

Mr Joe Kgobokoe, Deputy Director General (DDG): Policy, Planning and Monitoring & Evaluation, Department of Agriculture, Forestry and Fisheries (DAFF), said 42 of the 57 milestones that were planned for Quarter 2 were achieved. The Department was continuing to experience challenges with regard to the management of transversal performance indicators, which had historically contributed greatly to the unfavourable audit findings. The Department would be embarking on a process to review these transversal indicators to address the identified challenges and to ensure it adapts to the concept of “following the money.” Some of these challenges had been addressed during the formal engagements between DAFF branches and Auditor General of South Africa (AGSA) officials. These engagements were intended to promote collaboration and understanding of the audit process and requirements, with the aim of ensuring the Department was well prepared.

Mr Kgobokoe focused his presentation on non-achieved targets of the four programmes – administration; agricultural production, health and food safety; forestry and national resources management; and fisheries management.

Administration

The financial performance information was qualified due to misstatements regarding biological assets. The timing of the evaluation by AGSA had occurred long after the end of the financial year, where lots of external factors, including theft, had become a factor. The audit matrix had been developed to address the audit findings. The technical design specification (invoice tracking system) had not been done as initially planned. The process of integrating systems for the merged Department had changed the focus from the initial one, which was intending to service the old department of the DAFF. The process to integrate systems for the new Department had started. An invoice tracking system would be considered.

The 2019/20 first quarterly report on verified projects submitted to the executive committee (EXCO) had not been approved as targeted due queries which necessitated further investigation to validate the contents of the report. Mobilisation for the Kaonafatso ya Dikgomo (KYD) livestock programme and poultry was not done. The challenge was around the coordination of contracting between the provinces and the Agricultural Research Council (ARC) to address payment for services rendered. A memorandum of understanding (MoU) had been finalised to deal with all coordination issues.

Agricultural production, health and food safety

The 58% compliance for foot and mouth disease (FMD) and 30% compliance for Peste des Petits Ruminants (PPR) were not achieved as per the planned manual. Laboratory results of samples submitted had not been released. Due to capacity challenges in the laboratories, priority had been given to high risk diseases. This had caused delays of between four to five months. The stakeholder consultations on a brucellosis policy was not concluded, as gazetting for consultations ended on 15 February 2020. The process was put on hold to familiarise the new administration with what was being done.

Forestry and natural resources management

The transaction advisor for the re-commissioning of Western Cape state forest plantations had not been appointed. Upon evaluation, the bid evaluation committee had not selected the suitable service provider because the company had not attached the consolidated broad-based black economic empowerment (BBBEE) verification certificate as required. The committee had not appointed the second service provider, as it had submitted an exorbitant price. A decision to consider re-advertisement had been recommended.

Fisheries management

No new Operation Phakisa project was supported for the quarter under review. The annual target was exceeded during quarter 1. The draft aquaculture development implementation plan would be developed and implemented after the Parliamentary approval process. Four of the17 joint operations conducted with partners, including the Operation Phakisa initiative, were not conducted due to budget constraints. An action plan would be developed.

Ms Priscilla Sehoole, Acting DDG: Human Resources and Stakeholder Engagement, DAFF, reported the vacancy rate had increased from 20.9% to 21.7% in the last quarter. The Department has 1 326 vacant posts. 4 795 posts had been filled. The development of the macro organisational structure for the Department had been finalised. The human resources (HR) governance environment had been improved, as the HR delegations between the Minister and the Director General (DG) had been improved. The implementation of early retirement without penalisation of pension benefits in terms of Section 16(6) of the Public Service Act, was still a work in progress. The implementation of the Workplace Skills Plan had been monitored, and reports had been submitted to the Public Service Education and Training Authority (PSETA).

(Tables and graphs were shown to illustrate the staff age profile, DAFF’s senior management service profile, the vacancy rate and the employment equity profile).

Mr Jacob Hlatshwayo, Chief Financial Officer (CFO): DAFF, reported that the Department had received a qualified audit opinion from AGSA. The basis for the qualified opinion was that the Department had not recorded all disposals for biological assets, as there were inadequate systems to record the disposals. This had resulted in the amount of disposals disclosed being misstated. The AGSA was unable to determine the full extent of the misstatement, because it was impracticable to do so. Furthermore, AGSA was unable to obtain sufficient appropriate audit evidence for biological assets amounting to R52 416 196, as the compartments that contained these biological assets were inaccessible, so these assets could not be verified. Consequently, AGSA was unable to determine whether any further adjustments were required to biological assets stated at R877.6 million in the financial statements.

The audit matrix was compiled from the final audit management report issued by AGSA on 31 July 2019. All audit findings were included in the audit matrix in order to address the internal control deficiencies identified by AGSA. Some of the findings concerned suppliers who failed to declare their relationship with persons employed by the state; remunerative work outside the employment of the Department and employees’ disclosure of interest to the Department; invoices not paid within 30 days; late capturing of all categories of leave days; and poor safeguarding of the assets located within the KwaZulu-Natal (KZN) plantation of the Department.

To address the findings, a workshop was held on 7 to 8 August 2019, where the audit findings relating to biological assets and plantation management were unpacked, and a field verification action plan was developed. The implementation of the action plan was on-going. The current standard operating procedures on leave administration was in the process of being reviewed and updated. The HR management and development circular 1/2019, dated 27 May 2019, was issued to all employees to address the submission of leave forms.

Agricultural Research Council: Audit Improvement Plan

Ms Maureen Manyama, CFO: ARC, informed the Committee the entity had received a qualified audit opinion for three consecutive years since 2016/17. Even though the number of findings had been reduced, the organisation had findings which had had a negative impact on the opinion. The problematic areas were around compliance with procurement and contract management; revenue collection; biological assets; limitation of scope; trade and other receivables and trade with other payables; and uncorrected misstatements.

Internal control deficiencies related to the audit findings that had been raised by the AG included oversight responsibility; poor implementation of record management policies and procedures; poor implementation of proper record keeping; and poor preparation of regular, accurate and complete financial and performance reports.

As at 14 February 2020, there had been a number of initiatives that had been completed. Some were in progress, while others had missed deadlines. 15 initiatives had been completed, seven had missed the deadline, and 15 were still in progress. On initiatives that had been completed, prior year misstatements had been corrected in the financial records; improvements had been recorded on overall corporate governance; job profiles had been enhanced and performance agreements strengthened; the ARC’s interim financial statements had been submitted to the AG; and 100% of all assets had been physically verified, except for land and buildings.

Concerning the initiatives that had missed deadlines, delays had been documented in maintaining an updated lease register, the benchmarking of the rental incomes charges to market value, the scanning of subsistence and travel (S & T) documents and lease agreements; and the valuation of biological assets.

Lastly, regarding initiatives that were in progress, she said the reconciliation of accounts to be performed monthly had not yet been resolved. Cases related to irregular expenditure were being investigated by the internal audit. All net balances had to be transferred to income received in advance, or cleared per methodology. Effective management and maintenance of assets was on-going.

Ingonyama Trust Board: 2nd quarter performance

Mr Sandile Gabela, Acting Chief Executive Officer (CEO), Ingonyama Trust Board (ITB), said that the second quarter overall performance had been better than the previous year, and was standing at 79% compared to the previous 60%.

On the administration programme, the entity had approved two policies during quarter 1 against a target of five. One information technology (IT) solution had been implemented against a target of two, prompting the urgent implementation of a mimecast e-mail solution. 100% had been achieved in the recording of movable assets in the asset register. Two training programmes had been targeted against an annual target of 10.

With regard to land tenure management, 289 land tenure rights had been approved by the ITB against 400 targeted for the quarter. There has been one update on the land holding register against four targets for the year. Concerning support to traditional councils, no councils had been trained during the quarter. The Board was in the process of finalising the appointment of a training coordinator. The training had been moved to the third quarter. No traditional awards were granted during the quarter under review against an annual target of 100.

Mr Gabela also briefed the Committee on the audit improvement plan report. With regard to irregular expenditure, the entity needed to capacitate the supply chain management (SCM) unit with the requisite skills. National Treasury would provide training during March 2020. Regarding revenue royalties, the constitution of the mining committee had to rectify royalty administration, and confirm with the Department of Mineral Resources how much royalties had been claimed by National Treasury that belonged to the ITB.

The entity also needed to appoint a debt manager for revenue collection. In respect of incomplete disclosure of contingent liabilities, the ITB would need to obtain a legal opinion on the applicability of the rates. On the valuation of land, the entity was preparing and updating the land register based on information at the Deeds Office and theSurveyor General. It also had to obtain up to date municipal valuation rolls for computation of land values.

Lastly, he reported that the total expenditure for the second quarter amounted to R12.1m, which meant that 93.2% of quarterly budget had been spent in the quarter under review.

(Graphs and tables were shown to illustrate budget allocations and expenditure.)

Discussion

Deliberations with the DAFF

Ms N Mahlo (ANC) commented that she was not happy about the cancellation of the Nelson Mandela Day, the DAFF Women’s Summit and the Female Entrepreneur Awards, because there were many issues women were looking forward to addressing during these events. The Department should come up with a plan to address capacity challenges in its laboratories. She pleaded with the Department to complete the stakeholder engagement strategy.

Mr Kgobokoe said these events had been planned and, at a particular stage, information had been received they would not be taking place. These events were usually officiated by the Minister, so it could be that they had been cancelled because the diary of the Minister was full.

Mr N Capa (ANC) said that the biological assets should be given thorough attention, and indicated that in Programme 6 targets had been exceeded in the previous quarter, but had not been achieved during quarter 2. He felt the increased vacancy rate of the Department was not acceptable.

Ms T Mbabama (DA) wanted to know why there had been a change of focus in the process of integrating systems for the merged departments. She remarked there were no good reasons given for not implementing the media plans. She wanted to know which other diseases were posing challenges in the labs besides FMD, and asked for clarity about the placement of 255 graduates in the Department.

Mr Andile Hawes, DDG: Food Security and Agrarian Reform: DALRRD, replied that the graduates were part of the agrarian reform programme. These graduates were agriculture degree holders who were being given exposure to the practical side of agriculture, so that they were ready for the industry’s demands.

Dr Shadrack Moephuli, CEO: ARC, said swine fever was another disease that was posing a challenge, but PPR had not yet been recorded in SA.

Ms Sehoole explained that management had had to customise the information communication technology (ICT) system of the Department of Rural Development because the two departments -- DAFF and Rural Development -- were using different ICT systems. The new system was expected to be finalised by the end of March 2020.

Mr M Montwedi (EFF) pointed out that not a single provincial department of agriculture had met the first and second quarter targets. He wondered if the Department was not setting the provinces up for failure by setting targets they could not meet. Had the Department ever observed that the amount of money spent on planting was very high compared to output? He also indicated the ARC was not going to be able to deliver on the KyD programme, because the Department was failing to pay it.

Mr Mooketsa Ramasodi, DDG: Agricultural Production, Health and Food Security, DALRRD, responded that the Department had given provinces contracts on the KyD programme so that payments could be made to the ARC.

Mr Hawes made it clear that when the Department provided funding to farmers, it always informed the provinces to check on their yields. What was on the cards was to review the process now, because the process of checking their yields had not been properly handled.

Ms A Steyn (DA) remarked that financial misstatements were a concern, and the Committee needed to be given proper information in writing on the matter. She also commented that there were concerns about the quality of results from the laboratories. It was not acceptable to have sub-standard laboratories. She also wanted to find out which branches of the Department were affected by the increased vacancy rate, and asked if the Committee could be given a list of the vacancies.

Ms Sehoole said the Department would submit in writing a report on the branches that had vacancies.

Dr Moephuli said that capacity to conduct laboratory tests for diseases had never been a problem. The FMD outbreak had nothing to do with the capacity of the laboratories. The data submitted to the World Organisation for Animal Health (OIE) was part of the reference checking in a laboratory in Botswana. The ARC was conducting additional tests on the shelf life of the vaccine and its effectiveness. It had been found that the vaccine stayed within the animal for nine months.

Mr N Masipa (DA) asked for clarity on the seven export protocols for phytosanitary requirements. He remarked there had been no progress recorded or provided to the Committee on the R46.3m approved for the commercialisation of black producers. He added that during the State of the Nation Address (SONA), R3.9 billion had been announced for blended finance. He wanted to know how much had been spent of the R1 billion that was announced last year. How was the Department planning to address the problems of suppliers that were not paid in time, corrupt officials, a non-existent leave policy, and employees doing business with the Department?

Mr Ramasodi responded on the protocols, and said the budget has been spent because the work had been done, except for validation. Electronic certificates would be issued.

Mr Hawes said the commercialisation programme was there to ensure farmers were getting access to the markets, but it had later been realised that the programme needed to be reviewed. A panel had been appointed to look at the matter, and a report had been given to the DG.

Mr Mike Mlengana, DG, DAFF, added that AgriBEE had been approved. In the past, it had not been approved because it was not in line with the Act, and was seen to be acquisitive. 262 farmers had been identified for the commercialisation programme. The money that was invested for the farmers had been taken away from the Land Bank. The blended finance model had now been reinstated to the tune of R1 billion. He also indicated the Department had improved its efficiency processes and brought in people to change the behaviour within the Department regarding improvements to be made in areas like expenditure, supply chain management processes, etc.

Ms Sehoole said the Department was applying the Public Service and Administration Department’s determination policy with regard to the leave policy. On consequence management, some corrupt officials -- like Ms Siphokazi Ndudane -- had been dismissed for theft towards the end of last year.

Mr R Cebekhulu (IFP) urged the Department to pull up its socks in the fight against diseases, because the country was now exporting beef, and it should intensify its efforts on eradicating some foreign plants that were the carriers of those diseases which affected livestock.

Mr Ramasodi assured the Committee that vaccines were available from Onderstepoort Biological Products (OBP), even those fighting plant diseases.

Ms T Breedt (FF Plus) commented that the Department was not taking the Committee seriously. In the next financial year, there should be improvements. There should not be the same challenges every year. The Department should continue charging employees implicated in wrong doing, because wrongdoers had been seen being deployed to other departments and provinces. She wanted to know what was being done to address concurrent issues, because there were problems with provincial departments. Although the Department was striving to meet the challenges, there were no physical changes to agriculture in the provinces.

Mr Hawes replied that the Department was always having meetings with provincial departments to ensure they were aligned to the current changes taking place in terms of service delivery programmes. The Department of Performance Monitoring and Evaluation (DPME) was also having regular meetings with provinces to ensure everything was properly validated. Transversal indicators were being followed up at the national level.

Ms B Tshwete (ANC) wanted to know why 120 000 ha of underutilised land in communal areas cultivated for the Ilima programme production, and 120 690 ha of underutilised land in communal areas cultivated for the Comprehensive Agricultural Support Programme (CASP) production, were funded by different grants and different programmes.

Mr Hawes said money for these two schemes were coming from Programme 3, and these were CASP projects.

Ms K Mahlatsi (ANC) remarked that she did not understand why provinces were not implementing what they were supposed to do. The Department should next time provide the Committee with specifics on provinces, instead of presenting blanket coverage. The HR report had not stated the number of funded posts, priority posts, and advertised unfunded posts. She asked the Department to send the Committee a profile of employees aged between 25 and 29 in terms of what they were doing, including that of senior people who were about to exit the system. She pointed out the presentation had been silent on persons with disabilities in the second quarter, and she wondered if the Department would be able to mitigate this and meet the quarter 3 and 4 targets.

Ms M Tlhape (ANC) commented there was at least progress on the ICT invoice tracking system. The Department needed to invest in a big ICT system to address the reasons for non-achievement and meet the 4th Industrial Revolution demands. She wanted to know if the Department had considered implementing a voluntary retirement plan the senior employees in order to make way for the young ones.

Ms Sehoole said the Department was currently processing applications for voluntary retirement. The Department was not in a position to fire senior employees, because that would not be good labour relations.

The Chairperson asked if the Department was able to foresee a new financial structure for the new Department this year.

Mr Mlengana said the DG in the Presidency had briefed them that there would be new announcements on 1 April 2020. The Minister would be announcing a new DG for the Department.

Mr Kgobokoe added that a new structure which had been approved by the Minister and National Treasury would be announced during April. It would be a 12-month structure. The Department would start a new restructuring process which had been informed by the new strategic plan.

Deliberations with the ARC and ITB

Ms Mahlo suggested the ARC should stick to the recommendations of the AG. She asked the ITB to inform the Committee of the policies it was planning to approve in the future, and provide the Committee with a list of service providers and costs related to training.

Judge Jerome Ngwenya, Chairperson: ITB, said he would provide the details in writing, because he had been guided by the letter from the Committee on what to prepare for the presentation.

Mr Capa asked for clarity on the several delays to the initiatives of the ARC, especially on biological assets.

Dr Moephuli told the Committee it was the first time the ARC had received a finding on biological assets. It had to discuss with the AG on what really needed to be done. The ARC had held workshops on this and drafted a framework on the evaluation of biological assets. When that was done, it had to get experts to do the evaluation.

Ms Mbabama asked where the previous CEO of the ITB was, because the Committee had been presented with an Acting CEO. She wanted to know why the presentation had focused only on the ITB, to the exclusion of the Ingonyama Trust itself.

Judge Ngwenya said the CEO was on special leave. There were employees on suspension, pending investigations. The employees had been charged. Unfortunately, the presiding officer had died. Now they were restarting the process. Currently, the special leave was being contested, and there was a litigation process happening. He said the presentation made to the Committee had dealt with the Ingonyama Trust as well -- it had not focused only on the Board.

Mr Montwedi asked how the ARC was going to deal with the lack of revenue collection and long-standing debtors which had been picked up by the AG. He asked the ITB to provide an update on the Ministerial and Presidential intervention on the ITB. He also asked for clarity on the R4.6m spent on two workshops or training programmes, and wanted to find out if it had been spent before the appointment of the training coordinator. He also wanted to know what the paid advertisements were for.

Dr Moephuli pointed out that government departments and other entities were taking a long time to pay the ARC. As a result, the ARC had decided not to release test results until the bill was settled. That was not a nice thing to do, but the ARC had been forced to do it.

Ms Manyama added that 83% of revenue collection was sitting under 53 days +. This was related to old debt. The Department owed the ARC R170m, but had paid only R50m. Summons had been issued to the Department in an effort to collect revenue. There was a contract in place with the Department to pay a certain percentage before the commencement of any work.

Judge Ngwenya said the Presidential/Ministerial intervention on the ITB was outside of their scope. The Inter-Ministerial Committee had not met the Board. He said there had been training that took the shape of workshops. These included engagements between 200 Amakhosi and the Board on many issues that were in the public domain. That was where the budget had been spent. The advertisements had to do with posts that had to be filled, and events for catching a wider audience. The ITB was, among other things, inviting people who were holding Permits to Occupy (PTOs) and civil servants who wanted to claim a rural allowance.

Ms Steyn suggested the completed mining permits and the deeds register should be sent to the Committee. She wanted to know what land tenure management planning was. She also suggested that public hearings on the ITB would be good.

Judge Ngwenya said that was referring to leases, and that challenges to the Ingonyama Trust would be heard in the High Court.

Mr Cebekhulu wanted to establish what was going to happen to the tractors that were not functioning because of flat tyres, as they were meant to provide assistance to communities for ploughing the land.

Judge Ngwenya said he needed more information on the tractors lying fallow, and would report back to the Committee.

Ms Breedt asked if the ITB had sorted out its issues with the AG. Had the ARC got plans for consequence management? Had unsigned lease agreements been signed?

Judge Ngwenya maintained that if the AG understood how the ITB was doing its business, there would be no animosity. However, as long as the AG did not understand the ITB better, relations would not be cordial. There had been no love lost between the two entities because there had been no findings, for example, on royalties.

Dr Moephuli responded on consequence management, and said they still had to do a detailed investigation, not only into the individual implicated, but also on the string of individuals involved in the approval processes. Money had already been recovered from some of the individuals. He also pointed out the lease register had not yet been completed, and was related to employees. The matter had been referred to the bargaining council. He observed that not all properties of the ARC were well maintained, even though it had been found that the leases were not market related. They would continue to monitor red-flagged areas in order to avoid a limitation of scope.

Ms Tshwete indicated she was reluctant to comment on the ITB presentation, because she did not understand it. The presentation did not reflect what had last been discussed with the ITB in the Committee. She also pointed out that support for traditional councils had been zero for both the 2018/19 and 2019/20 financial years.

Judge Ngwenya said the presentation was around key performance indicators (KPIs), and on what the ITB had been requested to present to the Committee.

Ms Mahlatsi wanted to know if the ARC had adequate capacity in the internal audit and risk management areas. She asked how far the ITB was on outstanding policies, and wondered if relations between the AG and ITB could be mended, because there had been no understanding of what the ITB should be audited on.

Dr Moephuli said the ARC had appointed a person with a PhD for the risk management portfolio, and the internal audit function would continue to be outsourced.

Mr Gabela assured the Committee the work on the AG’s improvement plan would continue, and the register would be updated. The AG’s recommendations would also be implemented.

Ms Thlape wanted to know if there would be recovery on ITB targets not met in the coming quarters, seeing that there had been only 15% expenditure.

Mr Gabela gave the Committee comfort there would be improvements on some targets during Quarter 3. She hoped that by Quarter 4, all the targets would be completed.

The Chairperson asked for clarity on the viability of the ARC, and wanted to know if the ARC had the capacity to implement the things that needed to be done. How was the Department planning to settle the ARC debt?

Dr Moephuli said the ARC had the human capacity, but it needed to address behavioral issues to ensure people delivered services on time. A turnaround plan was in place to ensure the entity remained viable. The plan was informed by the strategic plan. The financial viability of the entity remained a concern unless the turnaround plan was implemented.

Mr Mlengana said the ARC was like a sick child suffering from a curable disease. It had been agreed the outstanding money to be paid to the ARC would be obtained from the Division of Revenue Act (DORA), but the provinces had to confirm if the ARC had done its work in the provinces. The ARC was in need of a financial boost amounting to R200m to see if it could stand alone. However, it did not appear as if it would be able to do that. He assured the Committee that the ARC would be paid its money.

The Chairperson suggested the Department should engage the Minister and National Treasury to ensure the “sick child” was cured, and find a lasting solution. Many competent people from the ARC would be lost if there was no lasting solution to the problems. He advised the ARC to send the Committee a confirmation of payment from the Department by 31 March 2020.

Lastly, he reminded the ITB that at the last engagement it had with the Committee, it had been asked to prepare a report on all the monies it had collected from the communities so as to inform the Committee about the projects implemented. He asked the ITB to come and present that report to the Committee during May 2020.